Daniel Slotta
Research expert covering Greater China
Banking industry in Taiwan - statistics & facts
The banking industry in Taiwan constitutes an essential cornerstone of the region’s economy and an integral part of daily life. The island's banking industry is home to a broad variety of institutions, including credit cooperatives, credit departments of farmers associations, as well as standard commercial banks. Over the past years, the region's overall banking industry faced increasing pressure to evolve and adapt to new geopolitical realities and trends within the banking industry itself.
Facing global environmental and societal challenges, the banking industry has embraced publishing ESG reports, as well as adjusting operations to meet ESG standards. In practice, it could translate to having a diverse workforce, engaging in charity work, and selecting ethical and environmentally responsible investments. According to an annual survey, Taiwanese banks had the highest credit exposure to land pollution and exhaust emissions. Taking ESG risks into account not only ensures the viability of future operations but also is a response to customer demands.
However, often crises do not only constitute risks but also have the potential to bring new opportunities. Because many businesses on the island are aware of the risks behind the Sino-American conflict and the threats associated with another pandemic, they also work on diversifying their business locations. For instance, many chip manufacturers like TSMC expand operations to the United States and Europe to make their supply chains more robust. Consequently, Taiwanese banks have the opportunity to follow enterprises abroad by financing and investing in overseas assets.
Adapting to industry trends
FinTech is already a staple in the global banking market. Most banks cannot avoid responding to the increasing demand for financial technology solutions and services. This is no different for Taiwanese banks. To adequately meet the demands of their clients, banks have embraced mobile payments, online banking platforms, and intelligent wealth management. In return, Taiwanese consumers embraced the introduction of mobile and online banking.Facing global environmental and societal challenges, the banking industry has embraced publishing ESG reports, as well as adjusting operations to meet ESG standards. In practice, it could translate to having a diverse workforce, engaging in charity work, and selecting ethical and environmentally responsible investments. According to an annual survey, Taiwanese banks had the highest credit exposure to land pollution and exhaust emissions. Taking ESG risks into account not only ensures the viability of future operations but also is a response to customer demands.
Threats and opportunities
A major issue for businesses on the island is responding to future geopolitical realities. As the coronavirus pandemic had demonstrated global crisis can disrupt the world economy, one that was used to international trade and commerce. In the case of Taiwan, banks not only worry that another black swan event could impact the industry but also have to take the effects of increasing tensions between mainland China and the United States into account. As a result, banks might shy away from overseas investments and instead focus on regional business.However, often crises do not only constitute risks but also have the potential to bring new opportunities. Because many businesses on the island are aware of the risks behind the Sino-American conflict and the threats associated with another pandemic, they also work on diversifying their business locations. For instance, many chip manufacturers like TSMC expand operations to the United States and Europe to make their supply chains more robust. Consequently, Taiwanese banks have the opportunity to follow enterprises abroad by financing and investing in overseas assets.
